<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission Only
[X] Definitive Proxy Statement (as permitted by Rule 14a-6(e)(2))
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to
Rule 14a-11(c) or Rule 14a-12
</TABLE>
REMEDYTEMP, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of filing fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transactions applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transactions applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11(set forth the
amount on which the filing fee is calculated and state how it
was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
- --------------------------------------------------------------------------------
(3) Filing party:
- --------------------------------------------------------------------------------
(4) Date filed:
- --------------------------------------------------------------------------------
<PAGE> 2
REMEDYTEMP, INC.
101 Enterprise
Aliso Viejo, CA 92656
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON FEBRUARY 29, 2000
To the Shareholders of REMEDYTEMP, INC.
The 2000 Annual Meeting of Shareholders (the "Meeting") of RemedyTemp,
Inc., a California corporation (the "Company"), will be held at the Company's
corporate headquarters located at 101 Enterprise, Aliso Viejo, California, on
February 29, 2000, at 12 noon Pacific Standard Time for the following purposes:
1. To elect a Board of Directors of eight (8) directors to serve until
the next annual meeting of shareholders of the Company and until their
successors are elected and qualified; and
2. To transact such other business as may properly come before the
Meeting or any adjournment or postponement thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice. The Board of Directors of the Company has
fixed the close of business on January 4, 2000 as the record date for the
determination of shareholders entitled to notice of and to vote at the Meeting.
ALL SHAREHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING. YOU ARE
URGED TO SIGN, DATE AND OTHERWISE COMPLETE THE ENCLOSED PROXY CARD AND RETURN IT
PROMPTLY IN THE ENCLOSED ENVELOPE WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING.
IF YOU ATTEND THE MEETING AND WISH TO DO SO, YOU MAY VOTE YOUR SHARES IN PERSON
EVEN IF YOU HAVE SIGNED AND RETURNED YOUR PROXY CARD.
By Order of the Board of Directors
/s/ COSMAS N. LYKOS
------------------------------------
Cosmas N. Lykos
Vice President, General Counsel and
Secretary
Aliso Viejo, California
January 10, 2000
<PAGE> 3
REMEDYTEMP, INC.
101 Enterprise
Aliso Viejo, CA 92656
------------
PROXY STATEMENT FOR THE
2000 ANNUAL MEETING OF SHAREHOLDERS
FEBRUARY 29, 2000
This Proxy Statement and related materials are furnished in connection
with the solicitation of proxies by the Board of Directors (the "Board") of
RemedyTemp, Inc., a California corporation (the "Company"), for use at the
Company's 2000 Annual Meeting of Shareholders (the "Meeting") to be held on
February 29, 2000, at 12 noon Pacific Standard Time and at any and all
postponements and adjournments of the Meeting. The Meeting will be held at the
Company's corporate headquarters located at 101 Enterprise, Aliso Viejo,
California. This Proxy Statement and the accompanying form of proxy will be
first mailed to shareholders on or about January 12, 2000.
The cost of preparing, assembling and mailing the Notice of Annual
Meeting of Shareholders, this Proxy Statement and form of proxy and the cost of
soliciting proxies will be paid by the Company. Proxies may be solicited in
person or by telephone, telegraph or cable, and by personnel of the Company who
will not receive any additional compensation for such solicitation. The Company
will pay brokers or other persons holding stock in their names or the names of
their nominees for the reasonable expenses of forwarding soliciting material to
their principals.
VOTING
The Board has fixed the close of business on January 4, 2000 as the
record date for the determination of shareholders entitled to notice of and to
vote at the Meeting. On that date, there were 7,058,196 shares of the Company's
Class A Common Stock ("Common Stock") outstanding. Each share of Common Stock is
entitled to one vote on any matter that may be presented for consideration and
action by the shareholders at the Meeting. Holders of the Company's Class B
Common Stock are not entitled to any vote in the election of directors or on any
other matters submitted to a shareholder vote except as to certain amendments to
the Company's Amended and Restated Articles of Incorporation (the "Articles of
Incorporation"), certain mergers and as otherwise required by law.
The holders of a majority of the shares of Common Stock outstanding on
the record date and entitled to be voted at the Meeting, present in person or by
proxy, will constitute a quorum for the transaction of business at the Meeting
and at any adjournments and postponements thereof. Abstentions and broker
non-votes are counted for the purpose of determining the presence or absence of
a quorum for the transaction of business, but have no legal effect on Proposal
No. 1, Election of Directors, which is determined by plurality.
Each shareholder entitled to vote may vote by proxy by using the proxy
card enclosed with this Proxy Statement. You can specify how you want your
shares voted on each proposal by marking the appropriate boxes on the proxy
card. The proposals are identified by number and identifying text on the proxy
card. Each proxy submitted by a shareholder will, unless otherwise directed by
the shareholder in the proxy, be voted according to the recommendation of the
Board on that proposal, as set forth later in this Proxy Statement. If a
shareholder has submitted a proxy appropriately directing how the shares
represented thereby are to be voted, such shares will be voted according to the
shareholder's direction. Any shareholder has the power to revoke his or her
proxy at any time before it is voted at the Meeting by submitting a written
notice of revocation to the Secretary or Assistant Secretary of the Company or
by filing a duly executed proxy bearing a later date. A proxy will not be voted
if the shareholder that executed it is present at the Meeting and elects to vote
the shares represented thereby in person.
<PAGE> 4
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The table below sets forth the following information as of January 4,
2000: (i) the number of shares of the Company's Class A Common Stock
beneficially owned by those known by the Company to be beneficial owners of more
than five percent (5%) of the outstanding shares of the Company's Class A Common
Stock; and (ii) the number of shares of the Company's Class A and Class B Common
Stock beneficially owned by each of the present directors, executive officers
named in the Summary Compensation Table on page 7 of this Proxy Statement, and
by all directors and executive officers of the Company as a group. On January 4,
2000, there were 7,058,196 shares of Class A Common Stock outstanding and
1,803,539 shares of Class B Common Stock outstanding. Unless otherwise stated,
and except for voting powers held jointly with a person's spouse, the persons
and entities named in the table have sole voting and investment power with
respect to all shares shown as beneficially owned by them. All information with
respect to beneficial ownership is based on filings made by the respective
beneficial owners with the Securities and Exchange Commission (the "Commission")
or information provided to the Company by such beneficial owners.
<TABLE>
<CAPTION>
CLASS A CLASS B
COMMON STOCK: COMMON STOCK:
AMOUNT AND NATURE AMOUNT AND NATURE
OF BENEFICIAL PERCENT OF OF BENEFICIAL PERCENT OF
BENEFICIAL OWNER OWNERSHIP(1) CLASS(%) OWNERSHIP(1)(2) CLASS(%)
---------------- ----------------- ---------- ----------------- ----------
<S> <C> <C> <C> <C>
William D. Cvengros (3)(4) 26,706 * -- --
James L. Doti (3)(4) 27,206 * -- --
Jeffrey A. Elias (5) 13,666 * -- --
Robert A. Elliott (4)(6) 25,706 * -- --
Mary George (7) 2,500
J. Michael Hagan (8) 18,206 * -- --
Robert E. McDonough, Sr. (4)(9) 2,060,857 29.0% 195,568 10.8%
101 Enterprise
Aliso Viejo, CA 92656
Paul W. Mikos (4)(9) 57,657 * 1,040,745 57.7%
101 Enterprise
Aliso Viejo, CA 92656
Greg Palmer (4)(10)(11) 74,097 *
Alan M. Purdy (12) 26,969 * -- --
John B. Zaepfel (3) 25,706 * -- --
Franklin Advisers, Inc. 870,181 12.3% -- --
901 Mariners Island Blvd.
San Mateo, CA 94404
Fidelity Management & Research Company 534,400 7.6% -- --
82 Devonshire Street
Boston, MA 02109-3614
All directors and executive officers as 2,449,839 32.9% 1,236,313 68.5%
a group (13 persons)
</TABLE>
2
<PAGE> 5
- ---------------------------
* Less than one percent (1%)
(1) The information contained in this table reflects "beneficial ownership"
as defined in Rule 13d-3 promulgated under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"). Shares not outstanding that
are subject to vested options, or options that vest and become
exercisable by the holder thereof within sixty (60) days of January 4,
2000 are deemed outstanding for the purposes of calculating the number
and percentage owned by such shareholder, but are not deemed
outstanding for the purpose of calculating the percentage owned by each
other shareholder listed. Unless otherwise noted, all shares listed as
beneficially owned by a shareholder are actually outstanding.
(2) Holders of Class B Common Stock are not entitled to any vote on matters
submitted to a shareholder vote except as to certain amendments to the
Articles of Incorporation, certain mergers and as otherwise required by
law. The Class B Common Stock automatically converts into Class A
Common Stock on a share-for-share basis upon the earliest to occur of
(i) a transfer to a non-affiliate of the holder thereof in a public
offering pursuant to an effective registration statement or Rule 144
promulgated under the Securities Act of 1933, as amended, (ii) the
death or legal incapacity of Robert E. McDonough, Sr., or (iii) the
tenth anniversary of the closing of the Company's initial public
offering.
(3) Includes 20,000 shares of Class A Common Stock that are issuable upon
exercise of vested non-employee director stock options and 5,000 shares
of Class A Common Stock that are issuable upon exercise of non-employee
director stock options that vest on the date of the Meeting if the
director remains a director until then.
(4) Includes shares held by certain trusts established for the benefit of
the shareholder and/or the shareholder's family.
(5) All shares are issuable upon exercise of vested stock options.
(6) Includes 15,000 shares of Class A Common Stock that are issuable upon
exercise of vested non-employee director stock options and 5,000 shares
of Class A Common Stock that are issuable upon exercise of non-employee
director stock options that vest on the date of the Meeting if the
director remains a director until then.
(7) All shares are issuable upon exercise of vested non-employee director
stock options.
(8) Includes 10,000 shares of Class A Common Stock that are issuable upon
exercise of vested non-employee director stock options and 5,000 shares
of Class A Common Stock that are issuable upon exercise of non-employee
director stock options that vest on the date of the Meeting if the
director remains a director until then.
(9) Includes 57,657 shares of Class A Common Stock that are issuable upon
exercise of vested stock options.
(10) Includes shares held in community property.
(11) Includes 66,667 shares of Class A Common Stock that are issuable upon
exercise of vested stock options.
(12) Includes 25,882 shares of Class A Common Stock that are issuable upon
exercise of vested stock options.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
NOMINEES FOR ELECTION
In general, the Company's directors are elected at each annual meeting
of shareholders. Currently, the number of directors of the Company is eight (8).
Accordingly, at the Meeting, the Company's shareholders are being asked to elect
eight (8) directors to serve until the next annual meeting of shareholders and
until their successors are elected and qualified. The nominees receiving the
greatest number of votes at the Meeting up to the number of authorized directors
will be elected.
The eight (8) nominees for election as directors at the Meeting as set
forth in the table on the following page are all incumbent directors. Messrs.
Cvengros, Elliott, Hagan, McDonough, Mikos, Zaepfel and Dr. Doti were re-elected
at the Company's 1998 Annual Meeting of Shareholders. Ms. George was elected by
the Board on November 15, 1999 to fill a vacancy. Each of the nominees has
consented to serve as a director if elected. Except to the extent that authority
to vote for any directors is withheld in a proxy, shares represented by proxies
will be voted FOR such nominees. In the event that any of the nominees for
director should before the Meeting become unable to serve if elected, shares
represented by proxies will be voted for such substitute nominees as may be
recommended by the Company's existing Board, unless other directions are given
in the proxies. To the best of the Company's knowledge, all the nominees will be
available to serve.
3
<PAGE> 6
The following biographical information is furnished with respect to the
eight (8) nominees for election at the Meeting as of January 4, 2000:
<TABLE>
<CAPTION>
NOMINEE AGE PRINCIPAL OCCUPATION DIRECTOR SINCE
- ------- --- -------------------- --------------
<S> <C> <C>
William D. Cvengros 51 Chief Executive Officer and President of PIMCO 1996
Advisors Holdings L.P.
James L. Doti 53 President, Chapman University 1996
Robert A. Elliott 60 Chairman, Elliott Investment Company 1997
Mary George 49 Chief Executive Officer, Bell Sports, Inc. 1999
J. Michael Hagan 60 Advisor to and former President and Chief 1998
Executive Officer of Furon Company
Robert E. McDonough, Sr. 77 Chairman of the Board of the Company 1978
Paul W. Mikos 55 Chief Executive Officer and President of the 1993
Company
John B. Zaepfel 63 Chief Executive Officer of the Zaepfel Group 1995
</TABLE>
William D. Cvengros has served as a director of the Company since
August 1996. Mr. Cvengros has been the Chief Executive Officer, President and a
director of PIMCO Advisors Holdings L.P., a publicly traded investment
management firm (PIMCO Advisors), since November 1994. Mr. Cvengros has
announced that he will be leaving PIMCO Advisors upon the completion of the
announced agreement for Allianz AG to acquire a majority of PIMCO Advisors,
scheduled to be completed by the end of March, 2000. At that time, Mr. Cvengros
will become Chief Executive Officer of PacketVideo Corporation, a privately-held
company providing wireless multi-media software and services for mobile
applications. From February 1986 until November 1994, Mr. Cvengros served as
Chairman of the Board of Pacific Investment Management Company (PIMCO). From
January 1990 until November 1994, Mr. Cvengros was Vice Chairman of the Board of
Directors and Chief Investment Officer of Pacific Life Insurance Company,
formerly Pacific Mutual Life Insurance Company. Mr. Cvengros served as a
director of Furon Company from 1987 to 1999.
James L. Doti, Ph.D. has served as a director of the Company since July
1996. Since July 1991, Dr. Doti has served as the President of Chapman
University. Dr. Doti has been a member of the Chapman University faculty since
1974 and also holds the Donald Bren Chair in Business and Economics. He is a
member of the Board of Directors of Fleetwood Enterprises, Standard Pacific
Corporation and First American Financial Corporation.
Robert A. Elliott has served as a director of the Company since
December 1997. Since 1988, Mr. Elliott has served as President and Chairman of
Elliott Investment Company. Prior to founding Elliott Investment Company, Mr.
Elliott served as the Chairman and Chief Executive Officer of VLI Corporation
("VLI"), a publicly traded company specializing in the manufacturing and
marketing of personal care products from 1984 until 1987. Prior to joining VLI,
Mr. Elliott was a Vice President of Howmedica, Inc., a subsidiary of Pfizer,
Inc. Mr. Elliott is a member of the Board of Trustees of Chapman University and
is a director of WestMed Venture Partners 2, L.P.
Mary George has served as a director of the Company since November
1999. Since October 1994, Ms. George has served as an officer of Bell Sports,
Inc., including as its Chief Executive Officer since July 1998. Additionally,
Ms. George has served as a director of Bell Sports, Inc. since August 1998.
J. Michael Hagan has served as a director of the Company since March
1998. From 1991 until November 1999, Mr. Hagan has served as Chairman of the
Board of Directors and Chief Executive Officer of Furon Company, having
previously served as President of Furon Company from 1980 to 1991. Since
November 1999, Mr. Hagan has served as an advisor to Furon Company. Mr. Hagan is
also a director of Freedom Communications, Inc. and Ameron, Inc.
4
<PAGE> 7
Robert E. McDonough, Sr. has served as Chairman of the Board of the
Company since August 1978. Mr. McDonough founded the Company in 1965 and has
been involved in the management, long-term operation and strategic planning of
the Company since that time. For 29 years, until May 1994, he served as the
Company's Chief Executive Officer. Mr. McDonough is the father-in-law of Paul W.
Mikos.
Paul W. Mikos has served in various positions in the Company since
1977, including as President since 1985. Mr. Mikos has served as Chief Executive
Officer of the Company since January 1996 and as a director of the Company since
May 1993. From May 1994 until January 1996, he served as co-Chief Executive
Officer of the Company. Prior to joining the Company, Mr. Mikos worked for ARA
as a Regional Sales Director from August 1976 until October 1977. From July 1968
until August 1976, Mr. Mikos worked for IBM in sales management. Mr. Mikos is
the son-in-law of Robert E. McDonough, Sr.
John B. Zaepfel has been a director of the Company since June 1995.
From 1974 until 1985, Mr. Zaepfel was President and Chief Executive Officer of
Chartpak-Picket Industries, Inc., a wholly-owned subsidiary of The Times Mirror
Company. In 1985, Mr. Zaepfel founded CPG International, Inc., a graphics art
and engineering firm, and served as its President and Chief Executive Officer
from 1985 until its sale in 1989. Since 1989, Mr. Zaepfel has been Chief
Executive Officer of the Zaepfel Group, a private investment and consulting
firm. Mr. Zaepfel is a director of the Troy Group, Inc.
ELIMINATION OF CUMULATIVE VOTING
The Company's Amended and Restated Bylaws (the "Bylaws") provide that
when the Company becomes a "listed corporation" within the meaning of the
California Corporations Code (i.e., has at least 800 holders of its equity
securities as of the record date of the Company's most recent annual meeting of
shareholders), cumulative voting rights will be eliminated. The Company had more
than 800 shareholders on February 19, 1997. Consequently, cumulative voting
rights were eliminated on February 19, 1997.
BOARD COMMITTEES AND MEETINGS
The Audit Committee of the Board ("Audit Committee") currently consists
of Messrs. Cvengros, Elliott and Zaepfel (Chairman). The Audit Committee meets
with the Company's independent accountants, makes recommendations to the Board
concerning the acceptance of the reports of such accountants and the accounting
policies and procedures of the Company, and reviews financial plans and
operating results of the Company.
The Leadership Development and Compensation Committee ("Compensation
Committee") of the Board currently consists of Mr. Cvengros, Dr. Doti (Chairman)
and Mr. Hagan. The Compensation Committee sets the performance goals, annual
salary and incentive compensation of the Company's executive officers and its
key employees. Additionally, the Compensation Committee administers the
Company's 1996 Stock Incentive Plan and 1996 Employee Stock Purchase Plan.
The Executive Committee of the Board ("Executive Committee") currently
consists of Dr. Doti, Mr. McDonough (Chairman) and Mr. Zaepfel. The Executive
Committee reviews the performance of the Company's Chief Executive Officer and
reports its evaluation of the Chief Executive Officer's performance to the
Compensation Committee. The Executive Committee also advises the Board regarding
strategic and acquisition planning recommendations.
The Nominating Committee of the Board ("Nominating") currently consists
of Mr. Cvengros (Chairman), Dr. Doti and Mr. Elliott. The Nominating Committee
identifies, interviews and recommends to the Board potential new Board members
and makes recommendations to the Board regarding corporate governance issues.
The Board acts as a committee of the whole with respect to nominations
for membership on the Board. The Nominating Committee will consider nominees
recommended by shareholders. A shareholder desiring to make such a
recommendation should submit the name, address, telephone number, and
qualifications of the proposed nominee in writing to the Company's Secretary and
must comply with the procedures set forth in Section 2.01(c) of the Company's
Bylaws.
5
<PAGE> 8
During the Company's fiscal year ended October 3, 1999, there were four
(4) meetings of the Board, two (2) meetings of the Audit Committee, three (3)
meetings of the Compensation Committee, three (3) meetings of the Nominating
Committee, and two (2) meetings of the Executive Committee. While a director,
each current Board member attended one hundred percent (100%) of the meetings of
the Board.
DIRECTORS' COMPENSATION
Directors who are also employees or officers of the Company receive no
extra compensation for their service on the Board. Prior to March 16, 1998,
non-employee, non-officer directors received an annual cash retainer of $18,000.
Pursuant to the Company's Non-Employee Director Compensation and Deferral Plan,
effective March 16, 1998 (the "Director Plan"), non-employee, non-officer
directors receive an annual retainer in the form of shares of Common Stock
valued at $20,000 on the date of their election or re-election to the Board (the
"Director Shares"). Once issued, the Director Shares are held in trust, on a
deferred basis until a director is no longer a director of the Company. The
Director Shares are issued to such trust no later than ten (10) business days
after the next annual meeting of shareholders following election or re-election,
provided that the director has remained a director during such time.
Participation in the Director Plan is mandatory. Additionally, cash fees of
$2,000 per Board meeting attended and $750 for each meeting of a committee of
the Board attended are paid by the Company to each non-employee director.
Non-employee directors also receive reimbursement for out-of-pocket expenses
relating to Company business.
Pursuant to the Company's 1996 Amended and Restated Stock Incentive
Plan (the "Incentive Plan"), each non-employee director of the Company
automatically receives, upon becoming a director, a one-time grant of an option
to purchase up to 5,000 shares of Common stock at an exercise price equal to the
fair market value of the Common Stock on the date of the option's grant. These
non-employee director options have a term of ten (10) years and become
exercisable with respect to fifty percent (50%) of the underlying shares on the
grant date and with respect to an additional fifty percent (50%) of the
underlying shares on the date of the next annual meeting of shareholders of the
Company following the grant date (or, if an annual meeting of shareholders
occurs within six months after the grant date, then on the date of the second
annual shareholders' meeting after the grant date), provided that the recipient
has remained a director since the grant date. In addition to an initial grant,
each non-employee director also will receive, upon each re-election to the
Board, an automatic grant of an option to purchase up to 2,500 additional shares
of Common Stock. These additional options will vest and become exercisable upon
the earlier to occur of (i) the first anniversary of the grant date, or (ii)
immediately prior to the annual meeting of shareholders of the Company next
following the grant date, if the director has served as a director from the
grant date to such earlier date. All non-employee director options will have a
term of ten (10) years and an exercise price equal to the fair market value of a
share of Common Stock on the date of grant. Vesting of non-employee director
options accelerates if the recipient of the option ceases to be a director of
the Company or its successor in connection with a change in control.
Grants of non-employee directors' options under the Incentive Plan
count against its current limit of 1,800,000 shares of Common Stock. Shares
underlying non-employee directors' options that expire or are terminated or
canceled will become available for further awards under the Incentive Plan. In
the event that a recipient of non-employee directors' options ceases to be a
director of the Company, all such options granted to the director will be
exercisable, to the extent they were exercisable at the date directorship
ceased, for a period of 365 days or, if earlier, the expiration of the option
according to its terms. Vesting accelerates upon certain transactions including
dissolution, merger and change in control. The Incentive Plan provides that the
exercise price may be paid by Company loan or withholding of underlying stock,
or deferred until completion of broker-assisted exercise and sale transactions.
At the completion of the Company's initial public offering of Common
Stock, Mr. Zaepfel was awarded a one-time grant of non-employee directors'
options to purchase 10,000 shares of Common Stock, pursuant to the terms of the
Incentive Plan then in effect. Upon their election to the Board, Mr. Cvengros,
Dr. Doti and Messrs. Elliott and Hagan were each awarded non-employee directors
options to purchase 10,000 shares of Common Stock pursuant to the terms of the
Incentive Plan then in effect. Additionally, on February 19, 1997, February 18,
1998, and February 17, 1999, Messrs. Cvengros, Zaepfel and Dr. Doti were
re-elected to the Board at the 1997, 1998 and 1999 Annual Meeting of
Shareholders and therefore each received automatic option grants to purchase up
to an additional 5,000 shares of Common Stock after each such meeting. On
November 15, 1999, under the amended terms of the Incentive Plan, Ms. George was
awarded a non-employee directors' option to purchase 5,000 shares of Common
Stock.
6
<PAGE> 9
RECOMMENDATION OF THE BOARD
The Board recommends that the shareholders vote FOR the eight (8)
nominees listed above. Proxies received will be so voted unless shareholders
specify otherwise in the proxy.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
SUMMARY COMPENSATION TABLE
The following table sets forth the compensation earned for the last
three (3) fiscal years by (i) each person who served as the Company's Chief
Executive Officer ("CEO") during the fiscal year ended October 3, 1999 and (ii)
the Company's four (4) most highly compensated executive officers other than the
CEO who were serving as executive officers at the end of the fiscal year ended
October 3, 1999 (the "Named Executive Officers").
<TABLE>
<CAPTION>
Long-Term
Compensation
Awards
------------
Annual Compensation Securities
------------------------- Underlying All Other
Name and Principal Position Year Salary ($) Bonus ($) Options (#) Compensation ($)
- --------------------------- ---- ---------- --------- ------------- ----------------
<S> <C> <C> <C> <C> <C>
Paul W. Mikos (1) 1999 433,072 215,000 20,000 *
President and 1998 410,000 410,000 25,000 *
Chief Executive Officer 1997 390,000 390,000 40,000 108,449
Robert E. McDonough, Sr. (2) 1999 410,000 190,000 20,000 *
Chairman of the 1998 410,000 410,000 25,000 *
Board of Directors 1997 390,000 390,000 40,000 87,404
Greg Palmer 1999 325,000 135,907 50,000 *
Chief Operations Officer and 1998 237,500 188,906 125,000 *
Executive Vice President 1997 -- -- -- --
Alan M. Purdy 1999 221,164 119,621 11,000 *
Senior Vice President, 1998 221,401 139,100 15,000 *
Chief Financial Officer, and 1997 200,902 110,000 20,000 *
Assistant Secretary
Jeffrey A. Elias 1999 215,750 102,696 11,000 *
Senior Vice President, Human 1998 215,892 129,363 15,000 *
Resources and Administration 1997 191,983 110,000 20,000 *
</TABLE>
7
<PAGE> 10
- ---------------------------
* Less than 10% of salary plus bonus.
(1) 1997 other annual compensation represents $71,431 in life insurance
premiums paid by the Company and $37,018 in use of Company-owned
vehicles. Insurance premiums cover life insurance policies with cash
surrender values owned by Mr. Mikos and death benefits payable to Mr.
Mikos's beneficiaries. Upon termination of certain of the policies, a
portion of the premiums paid is refundable to the Company.
(2) 1997 other annual compensation represents $64,979 in life insurance
premiums paid by the Company and $22,425 in use of Company-owned
vehicles. Insurance premiums cover life insurance policies with cash
surrender values owned by Mr. McDonough and death benefits payable to
Mr. McDonough's beneficiaries. Upon termination of certain of the
policies, a portion of the premiums paid is refundable to the Company.
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth information regarding stock options
granted to the Named Executive Officers during the fiscal year ended October 3,
1999:
<TABLE>
<CAPTION>
Individual Grants
-----------------------------------------------------------------
Potential Realizable Value at
Number % of Total Assumed Annual Rates of Stock
of Securities Options Price Appreciation for
Underlying Granted to Exercise Of Option Term($)(4)
Options Employees in Base Price Expiration -----------------------------
Name Granted (#)(1) Fiscal Year ($/share) (2) Date (3) 5%($) 10%($)
- ------------- -------------- ------------ ------------- ---------------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Paul W. Mikos 20,000 8.4% $14.81 December 2, 2008 $ 484,000 $ 770,000
Robert E. McDonough, Sr. 20,000 8.4% $14.81 December 2, 2008 $ 484,000 $ 770,000
Greg Palmer 50,000 21.1% $14.75 December 9, 2008 $1,205,000 $1,915,000
Alan M. Purdy 11,000 4.6% $14.75 December 8, 2008 $ 265,100 $ 421,300
Jeffrey A. Elias 11,000 4.6% $14.75 December 8, 2008 $ 265,100 $ 421,300
</TABLE>
- ---------------------------
(1) All options set forth in the above table were granted under the
Incentive Plan. All of the option grants are exercisable with respect
to thirty-three and one third percent (33 1/3%) of the shares covered
thereby starting on the first anniversary of the grant date, and
thereafter with respect to an additional thirty-three and one third
percent (33 1/3%) of the shares covered thereby on each successive
anniversary date. The Incentive Plan is administered by the
Compensation Committee, which has broad discretion and authority to
construe and interpret the Incentive Plan and to modify outstanding
options.
(2) The exercise price and tax withholding obligations related to the
exercise may be paid by delivery of already owned shares or by offset
of the underlying shares, subject to certain conditions. The Incentive
Plan permits the Compensation Committee to amend outstanding options;
provided, however, prior approval of the Company's shareholders is
required to lower the exercise price of outstanding options.
(3) All of the options were granted for a term of ten (10) years from the
grant date, subject to earlier termination upon certain events related
to termination of employment or a change in control of the Company.
(4) The potential realizable values listed are based on an assumption that
the market price of the Common Stock appreciates at the stated rate,
compounded annually, from the date of grant to the expiration date. The
five percent (5%) and ten percent (10%) assumed rates of appreciation
are determined by the rules of the Commission and do not represent the
Company's estimate of the future market value of the Common Stock.
Actual gains, if any, are dependent on the future market price of the
Common Stock.
8
<PAGE> 11
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
The following table sets forth the number of shares acquired on
exercise of stock options and the aggregate gains realized on exercise during
the fiscal year ended October 3, 1999 by the Named Executive Officers. The table
also sets forth the number of shares covered by exercisable and unexercisable
options held by such executives on October 3, 1999, and the aggregate gains that
would have been realized had these options been exercised on October 3, 1999,
even though these options were not exercised, and the unexercisable options
could not have been exercised, on that date.
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Shares Underlying Unexercised Options In-the-Money Options
Acquired at Fiscal Year End (#) At Fiscal Year End ($)(1)
on Value ------------------------------ -----------------------------
Name Exercise (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
- --------------- ------------ ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Paul W. Mikos -- -- 45,990 62,882 $15,225 $10,151
Robert E. -- -- 45,990 62,882 $15,225 $10,151
McDonough, Sr.
Greg Palmer -- -- 25,000 150,000 -- --
Alan M. Purdy 7,000 $31,960 17,216 37,216 $5,899 $10,151
Jeffrey A. Elias 11,441 $34,238 5,000 37,216 -- $10,151
</TABLE>
- ---------------------------
(1) These amounts represent the difference between the exercise price of
the in-the-money options and the market price of the Company's Common
Stock on October 1, 1999 (the last trading day of fiscal 1999). The
closing price of the Company's Common Stock on that day on the Nasdaq
National Market was $14.06. Options are in-the-money if the market
value of the shares covered thereby is greater than the option exercise
price.
EMPLOYMENT AND CONSULTING CONTRACTS
The Company has an employment agreement with Paul W. Mikos that expires
on May 1, 2002, pursuant to which the Company employs Mr. Mikos as its CEO and
President. The agreement provides for a base salary set annually by the
Compensation Committee; provided, however that Mr. Mikos's annual base salary
shall not be less than $450,000. Additionally, the agreement provides for an
annual performance bonus in an amount to be determined by the Compensation
Committee based upon satisfaction of certain performance goals set annually by
the Compensation Committee. The amount of Mr. Mikos's annual performance bonus
shall not exceed 100% of Mr. Mikos's base salary in any particular year, except
that Mr. Mikos's performance bonus may exceed 100% of his base salary in years
of extraordinary performance, as determined by the Compensation Committee.
Pursuant to the employment agreement, if the Company terminates Mr. Mikos's
employment, he shall be entitled to receive from the Company severance payments
consisting of $450,000 per year for two (2) years, payable on a semi-monthly
basis and all granted options will vest automatically and will remain
exercisable for the balance of their term. If the Company terminates Mr. Mikos's
employment "for cause" (as defined in the agreement), then all of the
unexercised options, whether or not vested, shall expire and become
unexercisable as of the date of such for cause termination.
The Company has an employment agreement with Robert E. McDonough, Sr.
that expires on December 4, 2001, pursuant to which the Company employs Mr.
Robert McDonough as Chairman of the Board. As amended, the agreement provides
for a base salary set annually by the Compensation Committee; provided, however
that Mr. McDonough's annual base salary shall not be less than $390,000.
Additionally, the agreement provides for an annual performance bonus in an
amount to be determined by the Compensation Committee based upon satisfaction of
certain performance goals set annually by the Compensation Committee. The amount
of Mr. McDonough's annual performance bonus shall be no less than $160,000 and
no more than 100% of Mr. McDonough's base salary in any particular year.
Additionally, pursuant to the terms of the agreement, Mr. McDonough is entitled
to annual demand registration rights and certain "piggyback" registration rights
in future registrations by the Company of its securities.
9
<PAGE> 12
The Company has an employment agreement with Greg Palmer that expires
January 5, 2003, pursuant to which the Company employs Mr. Palmer as its Chief
Operations Officer and Executive Vice President ("COO"). The agreement provides
for a base salary of $325,000 per year and an annual performance bonus of up to
$325,000 based upon satisfaction of annual performance goals set by the
Compensation Committee. Additionally, under the agreement, the Company granted
to Mr. Palmer on December 16, 1997 an option grant to purchase up to 125,000
shares of Common Stock at $20.72, the fair market value of the Common Stock on
the grant date. Such grant vests and becomes exercisable at a rate of twenty
percent (20%) per year over a five (5) year period with the first twenty percent
(20%) exercisable on December 16, 1998. The grant, once vested, will become
exercisable until December 16, 2007. Under the agreement, Mr. Palmer shall also
receive an annual grant from the Company of an option to purchase 50,000 shares
of Common Stock under a vesting schedule and such other terms as to be
determined by the Compensation Committee at the time of such annual grants to
the other officers of the Company. Pursuant to the agreement, if the Company
terminates Mr. Palmer's employment as COO without cause (as defined in the
agreement), he shall be entitled to receive from the Company a lump-sum
severance payment of Mr. Palmer's annual base salary then in effect plus maximum
annual bonus equal to one hundred percent (100%) of Mr. Palmer's then annual
salary and granted options will vest automatically and will remain exercisable
for the balance of their term. If the Company terminates Mr. Palmer's employment
"for cause" (as defined in the agreement), then all of the unexercised options,
whether or not vested, shall expire and become unexercisable as of the date of
such for cause termination. In the event that there are certain changes in
control of the Company and Mr. Palmer is terminated by the Company within one
(1) year of such change in control event for any reason except for cause, all
options granted shall become fully vested and exercisable for the balance of
their term.
The Company entered into a consulting agreement with R. Emmett
McDonough, the Company's former co-Chief Executive Officer and the son of Robert
E. McDonough, Sr., effective February 6, 1996. Under the terms of the agreement,
Mr. Emmett McDonough served as a consultant to the Company until August 1999 and
received annual compensation of $350,000, plus certain benefits.
The Company has agreements with Alan M. Purdy and Jeffrey A. Elias,
providing for a severance payment of at least twenty-four (24) months' salary
and bonus and twelve (12) months' salary and bonus, respectively, if employment
with the Company is terminated within twenty-four (24) months of certain changes
in ownership or management of the Company.
REPORT OF THE COMPENSATION COMMITTEE
ON EXECUTIVE COMPENSATION
The Compensation Committee is composed of three (3) non-employee,
non-officer, directors and is responsible for setting and administering the
policies governing annual compensation and performance goals of the executive
officers of the Company.
Compensation Policies and Philosophy
The Compensation Committee believes that the compensation for the
executive officers of the Company should be designed to attract, motivate and
retain talented executives responsible for the success of the Company. The
Compensation Committee determines the executive officers' compensation levels
after examining competitive market levels of similarly situated temporary
staffing companies and based upon the achievement of pre-established objectives,
individual contribution to the Company and the financial performance of the
Company. The Compensation Committee strives to set a fair and competitive base
salary for each of its executive officers coupled with an incentive cash bonus
tied to annual performance-based personal and Company goals. Additionally, the
Company strives to link its executive officers' compensation with the financial
performance of the Company and align the financial interests of the executive
officers with those of the Company's shareholders by providing equity-based
long-term incentives in the form of stock option grants.
10
<PAGE> 13
Compensation Components and Process
BASE SALARY. The base salary for each executive officer is determined
at levels considered appropriate for comparable positions at other similarly
situated temporary staffing companies.
PERFORMANCE BASED COMPENSATION. The Compensation Committee believes
that a substantial portion of the annual compensation of each executive officer
should be in the form of a cash bonus based on the satisfaction of certain
pre-established goals, including the financial performance of the Company. The
pre-established goals are a product of the Company's Management By Objective
Program ("MBO") in which the Compensation Committee establishes each executive
officer's goals after receiving suggestions from each executive officer.
STOCK OPTIONS. The goal of the Company's stock option grants is to
align the interests of executive officers with the interests of the Company's
shareholders and to provide each executive officer with a significant incentive
to manage the Company from the perspective of an owner with an equity stake in
the business. The Compensation Committee determines the amount of stock options
according to the executive's position within the Company, recent performance,
potential for future responsibility and promotion, and comparable awards made to
individuals in similar positions within the staffing industry. It is the general
practice of the Company to grant stock options to executive officers when they
join the Company. The Compensation Committee believes that these initial grants
give the recipients a meaningful stake in the Company's long-term performance,
with any ultimate realization of significant value from those options being
commensurate with returns available on investments in the Company's Common
Stock. In addition to initial grants, the Compensation Committee has adopted a
policy of providing additional long-term incentives to the Company's executive
officers primarily through periodic stock option grants. The Compensation
Committee believes that these incentives are essential to the long-term success
of the Company and serve to align the interests of the Company's officers with
the interests of its shareholders. Options are exercisable in the future at the
fair market value at the time of grant, so that an executive officer granted an
option is rewarded only by the appreciation in price of the Company's Common
Stock. Such grants, if any, are generally determined by the Compensation
Committee after the end of a fiscal year with the input and recommendation of
the Company's CEO.
Executive Officer Compensation
In November 1999, the Compensation Committee granted bonuses to certain
executive officers based upon the executive's achievement of such individual
MBOs and Company pre-established performance goals, which include the Company's
financial performance, based on revenue, income before income taxes, and net
income. To ensure that the Compensation Committee achieves its goal of setting
competitive compensation levels, the Compensation Committee commissioned a
comprehensive compensation analysis by an independent consultant, which
concluded that the Company's executive base salaries were competitive with other
temporary staffing companies, and that executive bonuses were competitive on a
percentage basis to the levels identified by surveys for other temporary
staffing companies.
Regarding compensation to executive officers other than base salary and
cash bonuses, the Compensation Committee also administers the Company's
Incentive Plan, pursuant to which the Company may grant various stock-based
awards intended to compensate Company personnel and align the interests of
recipients with the interests of the Company's shareholders. To date, only stock
options and performance grants have been granted under the Incentive Plan,
although the Compensation Committee may, in the future, utilize other types of
incentive awards available under the Incentive Plan. In fiscal 1999, the
Compensation Committee awarded certain executive officers stock options based
upon their respective work performance, level of responsibility, initiative and
achievement of individual MBOs and Company performance goals. The options
typically vest in periodic installments over a three year period contingent upon
the executive officer's continued employment with the Company. Accordingly, the
option will provide a return only if the executive officer remains with the
Company and only if the market price of the Company's Common Stock appreciates
over the option term.
11
<PAGE> 14
CEO Compensation
The Compensation Committee set the performance goals, salary, bonus
amount and stock option grant for fiscal 1999 of the Company's Chief Executive
Officer, Paul Mikos, with reference to market standards and satisfaction of
certain pre-established MBOs. Mr. Mikos's annual base salary of $410,000 was
increased to $450,000 by the Compensation Committee on May 2, 1999, reflecting
competitive market standards, the Compensation Committee's favorable evaluation
of Mr. Mikos's individual performance and his contributions to the strategic
management of the Company-owned and independently-managed offices. Mr. Mikos's
incentive compensation for fiscal 1999 consisted of a cash bonus of $215,000
(down from the fiscal 1998 cash bonus of $410,000) and an option grant to
purchase up to 20,000 shares of Common Stock (down from the fiscal 1998 grant of
an option to purchase up to 25,000 shares of Common Stock) (collectively the
"Incentive Compensation"). The option grant to Mr. Mikos is exercisable in the
future at the fair market value at the time of such grant. The Compensation
Committee based the Incentive Compensation primarily on Mr. Mikos's satisfaction
of his MBOs. Specifically, the pre-established performance goals were based on
quantitative and qualitative factors such as the Company's actual financial
performance, the satisfaction of direct office budgets, the Company's stock
performance compared to similar temporary staffing companies and the
implementation of the Company's strategic plan. The Company's actual financial
performance for fiscal 1999 in total revenue was above the pre-established
target level, while the Company's actual earnings per share and its income
before income taxes each exceeded 90% of the pre-established target levels.
Additionally, the Company's stock performance exceeded the average performance
of similar temporary staffing companies. Finally, Mr. Mikos continued the
Company's implementation of its business strategies and partially satisfied
direct office budget amounts. Consequently, based on Mr. Mikos's ability to
satisfy and exceed certain pre-established target levels and partially satisfy
other goals, the Compensation Committee set Mr. Mikos's Incentive Compensation
as set forth above.
COMPENSATION COMMITTEE:
William D. Cvengros
James L. Doti (Chairman)
J. Michael Hagan
COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
During fiscal year 1999, Mr. Cvengros, Dr. Doti and Mr. Hagan served as
members of the Compensation Committee. From September 27, 1998 until November
1998, Mr. Zaepfel served as a member of the Compensation Committee. In November
1998, the Board appointed Mr. Hagan to the Compensation Committee upon Mr.
Zaepfel's resignation from the Compensation Committee. No current member of the
Compensation Committee is a current or former officer or employee of the
Company. No executive officer of the Company served on the board of directors or
compensation committee of any entity that includes one or more members of the
Company's Board.
12
<PAGE> 15
STOCK PERFORMANCE GRAPH
The stock performance graph set forth below compares the cumulative
total shareholder return on the Company's Common Stock for the period from July
11, 1996 (the date on which the Company's Common Stock was first publicly
traded) and ending on October 3, 1999 with the Nasdaq Stock Market Composite
Index, peer issuers in the temporary staffing industry and the Russell 2000
Index. The Company has selected to compare its shareholder return with that of
the Russell 2000 Index because the Company believes that the Russell 2000 Index
includes companies with comparable market capitalization. The graph assumes that
$100 was invested on July 11, 1996 in the Company's Common Stock and each index
and that all dividends were reinvested. No cash dividends have been declared on
the Company's Common Stock. Although the graph would normally cover a five-year
period, the Company's Common Stock has been publicly traded since July 11, 1996,
so the graph commences as of that date. The comparisons in the graph are
required by the Commission and are not intended to forecast or be indicative of
possible future performance of the Company's Common Stock.
7/11/96 9/27/96 9/26/97 9/25/98 10/03/99
------- ------- ------- ------- --------
RemedyTemp, Inc. $100 $152 $172 $169 $108
Nasdaq Composite Index $100 $111 $153 $158 $248
Russell 2000 Index $100 $106 $138 $114 $130
Temporary Staffing
Industry Index(a) $100 $107 $131 $101 $ 74
- --------------------
(a) Staffing Composite Index consists of the following temporary staffing
companies: Modis Professional Services (formerly Accustaff), Metamor
Worldwide (formerly COREstaff), Interim Services, Kelly Services, Manpower,
Olsten, On Assignment, RemedyTemp, Inc., Robert Half International and
Western Staff.
13
<PAGE> 16
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under Section 16(a) of the Securities Exchange Act of 1934, the
directors and officers of the Company and persons who own more than ten percent
(10%) of the Company's equity securities are required to report their initial
ownership of the Company's equity securities and any subsequent changes in that
ownership to the Commission and the Nasdaq National Market. Specific due dates
for these reports have been established, and the Company is required to disclose
in this Proxy Statement any late filings during the fiscal year ended October 3,
1999. To the Company's knowledge, based solely on its review of the copies of
such reports required to be furnished to the Company during the fiscal year
ended October 3, 1999, all of these reports were timely filed.
SHAREHOLDER PROPOSALS
Shareholders who wish to include proposals for action at the Company's
2001 Annual Meeting of Shareholders in next year's proxy statement and proxy
card must cause their proposals to be received in writing by the Company at its
address set forth on the first page of this Proxy Statement no later than
September 13, 2000. Such proposals should be addressed to the Company's
Secretary, and may be included in next year's proxy statement if they comply
with certain rules and regulations promulgated by the Commission. Additionally,
the proxy solicited by the Board for the 2001 Annual Meeting of Shareholders
will confer discretionary authority to vote on any shareholder proposal
presented at that meeting unless the Company is provided with notice of such
proposal no later than November 27, 2000.
OTHER MATTERS
The Board does not know of any other matters that are to be presented
for action at the Meeting. Should any other matters come before the Meeting or
any adjournments and postponements thereof, the persons named in the enclosed
proxy will have the discretionary authority to vote all proxies received with
respect to such matters in accordance with their judgment.
INDEPENDENT PUBLIC ACCOUNTANTS
By selection of the Board, the firm of PricewaterhouseCoopers LLP has
served as the Company's independent accountants since 1989. The Board has again
selected PricewaterhouseCoopers LLP to serve as the Company's independent
accountants for the fiscal year ending October 3, 1999. One or more
representatives of PricewaterhouseCoopers LLP are expected to be present at the
Meeting, will have an opportunity to make a statement if they so desire, and
will be available to respond to appropriate questions.
ANNUAL REPORT AND FORM 10-K
The Company's 1999 Annual Report to Shareholders has been mailed to
shareholders concurrently with this Proxy Statement, but such report is not
incorporated herein and is not deemed to be a part of this proxy solicitation
material. THE COMPANY WILL MAIL WITHOUT CHARGE, UPON WRITTEN REQUEST, A COPY OF
ITS ANNUAL REPORT ON FORM 10-K, INCLUDING THE FINANCIAL STATEMENTS, SCHEDULES,
AND LIST OF EXHIBITS. REQUESTS SHOULD BE SENT TO REMEDYTEMP, INC., 101
ENTERPRISE, ALISO VIEJO, CALIFORNIA 92656, ATTENTION: INVESTOR RELATIONS.
Aliso Viejo, California
January 10, 2000
SHAREHOLDERS ARE URGED TO DATE, SIGN AND RETURN THE ENCLOSED PROXY CARD IN THE
ENCLOSED ENVELOPE. PROMPT RESPONSE IS HELPFUL, AND YOUR COOPERATION IS
APPRECIATED.
14
<PAGE> 17
REVOCABLE PROXY
REMEDYTEMP, INC.
101 ENTERPRISE
ALISO VIEJO, CALIFORNIA 92656
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Paul W. Mikos and Alan M. Purdy, or
either of them, each with full power of substitution, as the lawful proxies of
the undersigned and hereby authorizes such persons to represent and to vote as
designated on this proxy all shares of the Class A Common Stock ("Common Stock")
of RemedyTemp, Inc. ("RemedyTemp") which the undersigned would be entitled to
vote if personally present at the Annual Meeting of Shareholders of RemedyTemp
to be held on February 29, 2000 and at any adjournments or postponements thereof
(the "2000 Annual Meeting"). The matters referred to on this proxy are described
in the Proxy Statement for the Annual Meeting of Shareholders dated February 29,
2000.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE FOLLOWING NOMINEES:
1. Election of Directors
<TABLE>
<S> <C>
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY to vote for
(except as indicated to the contrary below) all nominees listed below
</TABLE>
NOMINEES: William D. Cvengros, James L. Doti, Robert A. Elliott, Mary George,
J. Michael Hagan, Robert E. McDonough, Sr., Paul W. Mikos, and
John B. Zaepfel
INSTRUCTIONS: To withhold authority to vote for any individual nominee, write
that nominee's name below:
- --------------------------------------------------------------------------------
2. In their discretion, the proxies are authorized to vote upon such other
matters and to transact such other business as may properly come before
the 2000 Annual Meeting.
CONTINUED ON REVERSE - SIGN, DATE AND RETURN
[BACK OF PROXY CARD]
THIS PROXY, WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS GIVEN, THIS PROXY WILL
BE VOTED FOR THE NOMINEES NAMED ABOVE FOR DIRECTOR.
The undersigned acknowledges receipt of the Notice of Annual Meeting
and Proxy Statement for the 2000 Annual Meeting.
Please sign, date and promptly return this proxy card using the
enclosed reply envelope. Whether or not you plan to attend the 2000 Annual
Meeting, you are urged to execute, date and return this proxy, which may be
revoked at any time prior to its use.
SIGNATURE _______________________________ SIGNATURE ________________________
Signature of Shareholder If Held Jointly
DATE __________, 2000 DATE __________, 2000
Please sign your name exactly as it appears hereon. When shares are held by
joint tenants both should sign. If you receive more than one proxy card, please
sign, date and return all cards received. When signed as attorney, executor,
administrators, trustee or guardian, please sign as such and give full title as
such. If a corporation, please sign in full corporate name by President or other
authorized officer. If a partnership, please sign in partnership name by
authorized person.
